Budget expectations - Real Estate Sector

EXPECTATIONS

1. Extension of 1% interest subvention on home loans by 1 yr.

2. Increase scope imit of ECB for  Real estate companies

3. Increase in tax benefit for home loan Interest (current Rs.0.15mn) and Principal repayment (Current Rs.0.1mn).

4.  Industry lobbying for infra status for affordable housing .

5. Tax incentives to developers for mid income housing and Slum rehabilitation schemes

6. Increase in service tax.

IMPACT

1.Positive for the sector as a whole.

2.ECB issuance is currently allowed for only low-cost and rural housing projects. Any extension of the limits with certain caveats will be positive for Real estate companies.

3.Positive for the residential developers.

4.Positive for the sector as a whole.

5.Positive for developers in mid income housing segment .

6. Slightly negative for the sector as it would increase the cost of purchasing homes and result in higher cost of construction.